FIX THE H-1B VISA PROGRAM
Date: Tuesday , May 03, 2016
April 1st is April Fools Day. It is also a day on which 600,000 applications are put into a random lottery system to pick the lucky 85,000 who are to be admitted to the U.S. to work for a three year period. This is indeed a foolish system and unsurprisingly the U.S. government picked April first as the date that this joke gets played out every year.
Being the capitalist system that we are, why do we run a lottery when we could be running an auction? Why not let the Indian IT services companies and other prospective employers pay top dollar to get the employees they want to get into the U.S.? If each one of the 85,000 entrants paid $50,000 to get a work permit, that would be a cool $4.25 Billion in revenue per year for job training for unemployed U.S. techies.
Also, there is no magic about 85,000 slots per year. We could adjust that number up or down to get the maximum revenue we can get from the program.
The danger with making potential employers pay for this fee is that this may lead to a slave labor type situation where the employer will then try and extract maximum value from its employee so that they could recover their investment. So I am in favor of making this a program where the visa is granted to a person and not linked to an employer.
Some of you may know of the EB-5 program where we sell green cards to people who are willing to invest $500,000 in an underdeveloped area in the U.S. (or one million dollars in a developed area) and create a certain number of jobs. These H-1B temporary work visas could be sold the same way. A person from say India could pay the fee, say $50,000 and get a temporary work visa so that they could live and work in the U.S. for three years. Hopefully, they make enough of a salary to recover their investment. If not, they decide that they cannot afford to pay another $50,000 to stay an additional three years and go back to India.
This system will ensure that we get the most motivated candidates from around the world. If an employer particularly likes a candidate, it could entice that candidate by giving them a soft loan of $50,000 to help them pay for their work permit. This way, no U.S. citizen will whine that they have the talent but cannot find a technology job. If an employer is willing to cough up $50,000 to get someone from across the world instead of hiring a local, that local may need to look in the mirror and ask himself some tough questions.
OK, so this system would be great for the U.S. but what about the Indian perspective? The more talented people who stay back in India, the better it is for India. Many of the leading Indian startups today are those started by Indians who have returned from the U.S., having studied or worked there. So the more restrictive the immigration policy of the U.S., the better off India will be.
In fact, there is an argument for India itself being more restrictive. This goes back to why Chinese companies like Alibaba, Baidu, and Tencent have become multi-billion dollar juggernauts that are able to compete with the best global companies confidently. China\'s restrictive policies enabled them to build critical mass. India has an opportunity to do the same. So instead of worrying about the U.S. immigration policies, the Indian government has an opportunity to harness this talent domestically and give them a chance to succeed in the new economy. This may require certain restrictions on trade and internet competition but after the initial hullaboo, everyone will accept India\'s right to empower its domestic startups to get critical mass so that they can compete.
America\'s restrictive immigration policies and India\'s restrictions on internet competition are two sides of the same coin. Both may seem counter to capitalist principles of free trade but given the current backlash against globalization, both nations could do well to embrace these policies.